Just closed on long term bank loans on 3 properties with my kids

[Shiloh Lundahl]

To be honest, I was given a leg up in life by my mom when she told me that she had an account with $20,000 that was set aside for my college education. With that money I was able to get a bachelors degree which led me to getting a master’s degree (which I paid for) in social work which led me to opening up a private therapy practice that produces a comfortable living. 

I am very grateful to my mother who made those sacrifices for me and planned ahead in order to help me transition into adulthood. And because it was so helpful to me, I wanted to do the same for my children but I wanted to do it through incorporating real estate into the equation so that my kids could learn about real estate investing along the way.

Here are the detail:

Last year I created an LLC with my 9-year old daughter and we bought a house together in August. We had to repair a plumbing issue (which the insurance company ultimately paid for) and do some other fixes.

Purchase price 137k

Repairs I Paid for 4K

Hard money for 11 months 14k

Other holding costs 2k

Closing costs with both closings 4K

Option fee that came to me 4K

Rental income for 9 1/2 months 13k

Total invested 144k

Market value 185k

Loan $129,500, 20 year commercial loan at 5.12% 5 year adjustable rate.

41k in equity created with about 15k left into the property. 

Monthly cash flow $210.

If tenant exercises the option at the end of the 4 year option agreement, estimated profit will be 72k split between my daughter and me.

I did a similar deal with my son in the same neighborhood as the house with my daughter.

Total profit with him at the end of the 4 years is estimated to be 59k with 24k left into the property. Monthly cash flow $240 a month.

The last deal is with my oldest daughter. The total profit at the end of the 4 years split between her and I is estimated to be 63k with 24k left into the property and $420 a month in cash flow (I don’t have a good picture with her infringe of the house).

let me know if you have any questions. I’m happy to share more about the process.